White Glove Health: Health 2.1?

October 12, 2012

Patrick Spain

One of the inspirations for First Stop Health was WhiteGlove Health, founded in 2006 with the goal to lower healthcare costs and improve people's productivity and morale by delivering primary healthcare in the patient's home or office. Launching in Austin, Texas, and now operating in nine cities in 5 states, WhiteGlove sends nurses to its members' homes and offices, claiming that they can address 70 percent of the situations presented in a primary care office, including minor lab testing and prescribing popular medications on the spot.

Initially focusing on individuals, WhiteGlove's membership spread by word of mouth in the Austin business community driven by good experience, reasonable prices, and its incredible convenience in under-doctored Texas. However, hampered by a high initial annual membership fee (now $420), growth beyond the executives who were initial customers was slower than necessary to sustain the infrastructure to deliver the services promised.

So founder Bob Fabio turned both to insurers and employers as a way to grow his subscriber base. While deals with Humana, United Healthcare, and Aetna grew his potential membership (the insured get access to WhiteGlove at the same co-pay as an office visit), insurance companies leave very little on the table for growing companies. So WhiteGlove has turned its focus to self-insured employers who have more control than the average employer over health costs and who, because of their size, represent a salesperson-worthy target.

Has this worked? We will have to wait and see. WhiteGlove's attempt to go public in 2011 failed for a variety of reasons, largely market-related but perhaps also because revolution in healthcare does not come easily or cheaply. Bob Fabio talks about the experience here. Following that effort WhiteGlove did raise $12.9 million in a private placement (full disclosure: the author sought to participate in this but was not able to) with another potential $15.3 million in warrants.

The principles are all sound: Make healthcare easier and pleasanter for patients, help employers who bear the brunt of healthcare costs save money, and create a service that meets the urgent need to find alternatives to traditional primary care approaches. But getting patients, employers, and insurers to change their habits is never easy.

To some extent they must all do so. I am sure that WhiteGlove has not just a good idea, but a great one. The problem for us entrepreneurs is usually about the timing. Are patients ready to give up Dr. Welby for nurse practitioners with a cup of chicken soup and a bottle of Gatorade (among the several "medications" WhiteGlove offers its members each visit)? And if they are ready to try something new, how soon will they agree to do so? And in which areas will they first change their behavior?

These are the questions that keep me awake as we consider the future of First Stop Health.

Originally published Oct 12, 2012 10:00:38 AM.